As I watched the 2024 Summer Olympics on CBC, I came to realize that a 12 hour ‘binge’ results in at least 12 ‘reverse mortgage’ ads and up to 24 ads for ‘no-medical, no blood test’ life insurance.
Next day: rinse repeat.
Juxtaposed against this are about 36 advertisements a day touting some types of prescription drugs – usually weight loss – or cures for gastric or skin upsets.
All the drug ads contained approximately 10 to 20 seconds of dire and memorable health warnings concerning side affects. Although noted quickly, they are clear and impactful. In other words, side effects, however complex, are communicated and at the very least, somewhat known to consumers.
The analogy of medical health to home finances in the form of the phrase ‘financial health’ is popular among advisors.
And it is not new. Here is what Chatbot GPT has to say about it:
- “In the 20th century, the personal finance movement gained momentum, particularly in the United States. Influential figures like Benjamin Graham, who wrote “The Intelligent Investor,” and later, financial advisors like Dave Ramsey and Suze Orman, popularized the idea of financial health by providing advice on saving, investing, and managing debt.
- Health Analogy: The analogy between financial well-being and physical health likely became popular as a way to make financial concepts more relatable. Just as physical health involves maintaining good practices to ensure a healthy body, financial health involves managing one’s finances to ensure economic stability and security.
Today, financial health encompasses various aspects, including income stability, savings, investments, debt management, and financial planning, aiming to ensure individuals and organizations can meet their financial goals and handle economic challenges.”
All doctors are required to take pharmacology courses and as a doctor friend from the US told me when explaining a drug my mother had been prescribed:
“It is always a trade-off with ANY medication with the benefits being evaluated against the side effects because, as the pharmacologist professor warned all of us:
“Drugs have MULTIPLE actions. We just choose to ignore those effects unwanted and call them side effects.”
Well, financial interventions intended to do good things all have multiple actions too and those actions could also be seen as side effects.
One side effect of taking on a ‘reverse mortgage’ is that it acts like a loan that one does not repay in monthly installments but must repay at a later date. It incurs interest charges that can erode equity in one’s home.
‘No medical, no blood test’ insurance policies can mean that healthy persons may be placing themselves in risk pools with sicker people. This means that premiums for these policies can be more expensive than premiums paid on insurance policies where detailed medical information is required.
At my low income retirement sessions conducted at libraries across Ontario, the majority of attendees are thunderstruck to understand that a reverse mortgage is a loan that must be repaid as opposed to a method of obtaining free money that they do not have to repay. When I question them, they most often say that they would never choose to move or sell their homes meaning that they will never have to repay.
The majority of attendees also say that they believe ‘no medical – no blood tests’ life insurance is ‘probably cheaper’ as there are reduced administration charges associated with avoiding medical exams and blood tests.
I therefore propose some very modest and simple financial health warnings that are not nearly as lurid as some of the health warnings for prescription drugs.
- Reverse mortgages:
A reverse mortgage is a loan that results in a debt that must be repaid
- No medical life insurance:
Providing a detailed medical report may result in lower life insurance costs.
Compared to the drugs, this is really tame stuff.
And if we are serious about ‘financial health’, then talking about side effects as part of marketing should be readily acceptable to all. It’s time.
Js/Aug 6, 2024